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The appearance of homo rivalis: Social preferences and the nature of rent seeking

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  • Benedikt Herrmann

    ()
    (University of Nottingham)

  • Henrik Orzen

    ()
    (University of Nottingham)

Abstract

While numerous experiments demonstrate how pro-sociality can influence economic decision-making, evidence on explicitly anti-social economic behavior has thus far been limited. In this paper we investigate the importance of spite in experimental rent-seeking contests. Although, as we show, existing evidence of excessive rent-seeking is in theory compatible with fairness considerations, our social preference elicitations reveal that subjects’ investments are driven by spite, not fairness or reciprocity. We also observe a striking disconnect between individuals’ revealed social preferences in our contest game and in a standard prisoner’s dilemma, rejecting the idea that there are consistent pro-social, selfish or anti-social “types”. Moreover, we find that cooperation and reciprocity rates drop substantially after subjects have been exposed to rent-seeking competition.

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Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2008-10.

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Date of creation: Aug 2008
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Handle: RePEc:cdx:dpaper:2008-10

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Keywords: Contests; Other-regarding preferences; Experiments;

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